10. A machine was purchased for $54,000 and it was estimated to have a $9,000 salvage value at the end of its useful life. Monthly depreciation expense of $750 was recorded using the straight-line method. The annual depreciation rate is A)2%. ) 20%. C)16%. D) 25%, 11. When the straight-line method of amortization is used for a bond premium, the amount of interest expense for an interest period is calculated by A) adding the amount of premium amortized for that period to the amount of cash paid for interest during the period. B) subtracting the amount of premium amortized for that period from the amount of cash paid for interest during the period. C) multiplying the face value of the bonds by the stated interest rate. D) multiplying the face value of the bonds by the market interest rate. 12. Which of the following statements about treasury stock is true? A) Purchasing treasury stock is done to eliminate hostile shareholder buyouts B) Companies acquire treasury stock to increase the number of shares outstanding. C) Few corporations have treasury stock D) Companies acquire treasury stock to decrease eamings per share 13. A company sells a plant asset that originally cost $240,000 for $80,000 on December 31, 2014. The accumulated depreciation account had a balance of $120,000 after the current years depreciation of $20,000 had been recorded. The company should recognize a A) $80,000 loss on disposal. B) $40,000 gain on disposal. C) $80,000 gain on disposal. D) $40,000 loss on disposal. 14. What is the total stockholders' equity based on the following account balances? Common Stock Paid-In Capital in Excess of Par Retained Eamings Treasury Stock A) $2,550,000. B) $2,190,000. C) $2,430,000. D) $1,680,000. $1,800,000 120,000 570,000 60,000 Version 2 Page 3